Every trade on an exchange starts with an order — instructions to your broker on what, how much, and at what price to buy or sell. Choosing the right order type determines how much you pay and whether you avoid losses from unexpected price swings.

Market Order

A command to "buy right now at any available price". It executes instantly, but the price may differ from what you see on screen — this is called slippage. On liquid securities, the difference is minimal; on rarely traded ones, it can reach several percent.

When to use: when speed matters more than exact price.

Limit Order

You set a specific price: "buy no more than 12,000 sum". Your order waits in queue until the market reaches the desired level. If the price never comes — the trade won't happen.

When to use: almost always if you're not in a hurry. Especially in illiquid markets where stock prices can swing on rare trades.

Stop-Loss

A protective order that automatically closes your position if the price moves against you to a set level. You bought at 10,000 and set a stop at 9,500 — if it falls to this point, the security sells and your loss is limited to 5%.

Golden rule: set stop-loss when opening a trade, not "when it gets scary". Without it, one failed position can wipe out months of profits.

Take-Profit

The reverse order — locks in profit when your target price is reached. You bought at 10,000, take-profit at 11,000 — when it rises, the trade closes automatically, even if you're away from the screen.

Stop-Limit and Trailing Stop

  • Stop-Limit — after the stop triggers, a limit order is placed instead of a market order. Protects from selling at too low a price, but may not execute during sharp declines.
  • Trailing Stop — a "floating" stop that follows the price as it moves in your favor. Lets you hold a profitable position and not give back your gains.

How to Set Levels

  1. Place stops just beyond the nearest support level, not at "round" numbers — that's where they'll get triggered first.
  2. Risk-to-reward ratio should be no worse than 1:2: risk 500 sum to gain 1,000 or more.
  3. Don't move your stop further from the price after opening a trade — this is the most common path to big losses.

Complete Example

Buy 100 shares with a limit order at 10,000 sum. Immediately set: stop-loss at 9,600 (risk 40,000 sum) and take-profit at 10,900 (potential 90,000 sum). Ratio of 1:2.25 — the trade makes sense.

Bottom line: enter with a limit, protect with a stop, lock in profits with take-profit. Three orders instead of one — and the market stops being a lottery.